By Andrew Lapping, Chief Investment Officer at Allan Gray



As South Africans, we want our country to prosper and the quality of life for all those living within our borders to improve. Millions live in total poverty and rely on family or intermittent work to get by: life is tough, and often short, as malnutrition and hardship take their toll. The most effective way to lift people out of poverty and improve quality of life is through education and economic growth.&nbsp;



I am concerned that our government’s lockdown approach and the subsequent economic hardship inflicted on our people will cost more lives than it can save. I realise this is a controversial statement in a context where people are very fearful and understandably concerned about their health and the wellbeing of their families. An effective government must make difficult decisions that involve trade-offs and cost-benefit analysis. I am not saying we should trade lives for economic growth; I am saying we must consider how we can save as many lives as possible and give better lives to as many South Africans as possible with our limited resources.&nbsp;



President Cyril Ramaphosa’s initial lockdown decision was justified to buy time in order to gather our health resources and prepare our hospitals. It was never meant to be a strategy to eliminate the COVID-19 virus – this is an impossibility. The idea behind lockdown is that the same number of people get ill, but the infections are spread over a longer time in an effort not to overwhelm the health system. Our government’s lockdown strategy has morphed into something else entirely.&nbsp;



As new information emerges, it seems the virus mortality rate is substantially less than many feared, and many of the more alarmist predictions that led to lockdowns across the globe have proven to be flawed. The government must absorb this information, particularly given the youthful South African population.



There are two important questions:



<ul><li>How many COVID-19 fatalities can be avoided through the lockdown?</li><li>What is the economic, and therefore human, cost of the lockdown?&nbsp;</li></ul>



I will not go into detail on the potential number of lives saved by the lockdown. There is a great deal of information available* that indicates the lives saved by this strategy will be minimal unless the lockdown means the number of infections can be supressed until a vaccine becomes available. Data indicates the mortality rate for those below 70 years of age is less than 0.2%; only 2.9% of South Africa’s population is older than 70. Furthermore, lockdowns or a lack thereof, seem to make little difference to the total number of cases a country experiences. It sounds tragic and defeatist, but it is not possible to make the virus disappear through lockdown, particularly in a country like South Africa.&nbsp;



Economic and human costs are two sides of the same coin. Studies indicate that mortality rates double with job losses. A smaller economy means fewer resources to allocate to healthcare and education in future. National Treasury thinks up to seven million people could lose their jobs. This could lead to tens of thousands of additional deaths.&nbsp;



The stimulus package outlined by the government is R500bn. SARS thinks tax collection could fall by R250bn this year as a result of the shutdown.&nbsp;Given government reallocations, this means additional debt of&nbsp;approximately R500bn in a single year. The economic damage will linger, tax collections are unlikely to recover to previous levels for years to come. The&nbsp;R50bn interest bill on this additional debt burden means&nbsp;R50bn less to spend on education, healthcare or other services – not just in 2020, but in perpetuity.&nbsp;



An extreme worst-case scenario for South Africa is 150&nbsp;000 COVID-19 deaths (most models indicate worst-case scenarios of 50 000). This is based on 50% of people contracting the virus with a 0.5% fatality rate. (A more likely worst case is a 0.2% mortality rate of 50% of the population, which is 60 000). This is a huge number of deaths and a great tragedy. Let’s assume the lockdown manages to reduce the number of fatalities by 50% by supressing the illness until a vaccine is discovered: This would be an incredible success. 75 000 lives would be saved. The direct cost per life saved in this scenario is R6.6 million; indirect costs will be far greater. I know this puts a price on human life but, unfortunately, this is what government has to do every day when allocating resources. On&nbsp; the other end of the spectrum, if the disease can’t be stopped, and a vaccine is not discovered, then almost no lives will be saved from COVID, but we will have destroyed the economy, increased government debt by R500bn, and lost a great number of lives through higher mortality not related to COVID. South Africa’s 2020 budget called for healthcare spending of R229bn and police expenditure of R221bn: small amounts in comparison.



Sadly, because South Africa is a poor country, we have a very high mortality rate, and therefore low life expectancy. 410 000 South Africans die from natural causes each year, including 37 000 people from TB and 32 000 from diabetes. In addition, 15 000 die in road accidents and 21 000 are murdered. These deaths are equally tragic and perhaps even more so as they are often preventable.&nbsp;



Unlike Europe, South Africa has a limited social security net and an informal economy. Many people have no savings and have lost their livelihood with the lockdown. Hunger is an immediate reality. Malnourished children are disadvantaged for the remainder of their lives due to stunting. The government provides a child grant, but there are millions of immigrant children who have no access to this grant.&nbsp;



Just as economic growth and prosperity save lives, economic destruction and poverty cost lives.&nbsp;



So why am I writing this now? Firstly, every week the lockdown continues, the economic cost compounds. Since the lockdown was enacted six weeks ago, I have urged government to consider the full picture, including the human and economic costs of their decisions, and I have provided them with balanced data. I have detailed how this data indicates the lockdown strategy is tragically flawed. We can no longer afford to blame “the virus”, when the vast majority of the job losses and suffering is the consequence of a strategy that has not fully accounted for the human cost of the lockdown on the economy. I hope that in making this commentary I am contributing to a heightened awareness of the issues, not emotion, underpinning this discourse.



Secondly, it is to reiterate how we think about managing your portfolios against this backdrop. We all have our views on what is the right or wrong strategy for government. However, most importantly for us as investors, we must deal with the situation as it is, and invest your funds accordingly to protect capital and maximise long-term returns.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: South Africa eases lockdown to revive battered economy

Op-Ed: Counting the economic cost of South Africa’s lockdown

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By <a href="https://theconversation.com/profiles/agnes-binagwaho-397402">Agnes Binagwaho</a>, <a href="http://theconversation.com/institutions/university-of-global-health-equity-3205">University of Global Health Equity</a> and <a href="https://theconversation.com/profiles/miriam-frisch-843046">Miriam Frisch</a>, <a href="http://theconversation.com/institutions/university-of-global-health-equity-3205">University of Global Health Equity</a>

Seven countries around the world – three of them in Africa – have made faster than expected progress over the past 15 years in reducing <a href="https://data.unicef.org/topic/child-survival/under-five-mortality/">deaths among children younger than five</a>. These seven countries, Bangladesh, Cambodia, Ethiopia, Nepal, Peru, Rwanda and Senegal, were selected because they have all performed unexpectedly well in improving childhood health relative to their <a href="https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG">economic growth</a>. 

There are many factors at the root of their achievements, most notably, a strong integrated and coordinated health system built on primary health care. However, one cross-cutting factor stands out that we believe allowed them all to achieve significant health gains but which, so far, tends to be always overlooked: trust.

This is clear from a <a href="https://wellcome.ac.uk/sites/default/files/wellcome-global-monitor-2018.pdf">report</a>, published by the Wellcome Trust and the Gallup Institute earlier this year. It surveyed 140,000 people in 140 countries to find out how they felt about science and health. 

A study on public attitudes to science and health on a global scale, the survey covered topics such as whether people
trust science, scientists, and information about health; the levels of understanding and interest in science and health; the benefits of science;
the compatibility of religion and science; and attitudes to vaccines. 

There’s a remarkable overlap between countries that have achieved progress in health goals such as reducing under-5 mortality, and those that ranked high in the trust survey. All seven were among the highest ranked globally when it came to their populations’ belief in the importance of vaccines while six out of the seven ranked highly in their trust in hospitals and health clinics. 

There’s logic in this. With greater population trust in health systems, health uptake and health outcomes improve. People are more likely to understand the benefits of health services and place a high value in receiving these services. This includes trusting in vaccinations which would lead people to placing a high value on vaccinating their children.

Rwanda in particular has done well in building population trust. According to the survey, the country reports the highest levels of confidence in hospitals and health clinics in the world, and the largest proportion of the population who agree that vaccines are effective. Rwanda also comes out on top in the world in terms of how much of its population believes that vaccines are important for children and in <a href="https://data.unicef.org/resources/immunization-coverage-estimates-data-visualization/">the percentage of children who are vaccinated.</a>

This is the result of the work the Rwandan government has done over the past 25 years to build a strong health system and foster an inclusive approach to health coverage, starting at a community level. These actions can serve as a model for other countries to replicate.

<h2>Crucial steps</h2>

It is 25 years since Rwanda was destroyed by the <a href="https://www.un.org/en/ga/search/view_doc.asp?symbol=S/1999/1257">1994 genocide</a> against the Tutsi. Since then, the country of more than <a href="http://www.statistics.gov.rw/statistical-publications/subject/population-size-and-population-characteristics">12 million</a> people has developed a <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(14)60574-2/fulltext?rss=yes">strong, decentralised health system</a> and addressed many of the major financial and geographic barriers that vulnerable populations face in accessing healthcare services. 

Some of the steps have included:

Prioritising programmes that leave no one out

Building a decentralised health system: There are 15,000 villages in Rwanda. By 2018, each one had <a href="http://www.rbc.gov.rw/index.php?id=19&amp;tx_ttnews%5Btt_news%5D=447&amp;cHash=c95bbbc0655d12b71c9ccdc675ab2313">four community health workers</a>. These community health workers are elected by their peers and are highly respected, trusted members of their communities who are spending sleepless night to keep their peers healthy. 

The trust that’s been built between community health workers and the people they represent has provided a strong foundation in developing broader trust in health systems and in the government that created the system.

Promoting the uptake of health services and vaccination service delivery: Community health workers, among other tasks, ensure that all pregnant women in their village attend antenatal clinics and deliver in a health facility, that every child gets vaccinated, and that community members are educated about the importance of vaccines and other preventive and curative treatments.

Offering universal access to a range of treatments: For example, HIV prevention care and treatment services, including the use of antiretroviral treatment.

All these measures contributed to growing population trust in the health system. People feel more comfortable in seeking out healthcare at health facilities and trusting the advice given to them by health professionals. 

<h2>More work remains</h2>

There have been <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(14)60574-2/fulltext?rss=yes">tangible benefits</a> to this rebuilding. Life expectancy has doubled. Immunisation coverage rates also increased from less than 30% in 1995 (with five kinds of vaccines administered) to 94% in 2015, with <a href="http://www.nitag-resource.org/uploads/media/default/0001/03/ff28cb2c2cb72344d4d7416d8178b25407d57cbb.pdf">10 vaccines administered to boys and 11 administered to girls, including the HPV vaccine</a>.

This is not to say that Rwanda doesn’t have more work to do. That’s also true of that the other six countries that performed well in the Wellcome Global Monitor.

Education remains a critical gap. The Wellcome Global Monitor <a href="https://wellcome.ac.uk/sites/default/files/wellcome-global-monitor-2018.pdf">reported</a> that the seven countries had some of the highest population proportions with little to no knowledge of science, especially among older people.

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 Read more:
 <a href="http://theconversation.com/rwanda-university-sets-out-to-teach-doctors-medicine-and-management-110527">Rwanda university sets out to teach doctors medicine and management</a>
 
 

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A lack of science education is a major barrier to improving health outcomes and achieving and sustaining <a href="https://www.who.int/health_financing/universal_coverage_definition/en/">universal health coverage</a>. Strong education systems that are training our scientists, clinicians and health professionals are crucial to ensuring countries have enough skilled professionals to provide high quality care to everyone. 

This is a gap we are trying to fill at the <a href="https://ughe.org/">University of Global Health Equity</a> in the rural north of Rwanda: to train future clinicians to have the tools to effectively address inequities in healthcare and to build and maintain health systems that leave no one out.<img decoding="async" loading="lazy" src="https://counter.theconversation.com/content/124183/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important">

<a href="https://theconversation.com/profiles/agnes-binagwaho-397402">Agnes Binagwaho</a>, Vice Chancellor, <a href="http://theconversation.com/institutions/university-of-global-health-equity-3205">University of Global Health Equity</a> and <a href="https://theconversation.com/profiles/miriam-frisch-843046">Miriam Frisch</a>, Research Associate to the Vice Chancellor, <a href="http://theconversation.com/institutions/university-of-global-health-equity-3205">University of Global Health Equity</a>

This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/lessons-from-rwanda-on-how-trust-can-help-repair-a-broken-health-system-124183">original article</a>.

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Op-Ed: Counting the economic cost of South Africa’s lockdown

Here are lessons from Rwanda on how trust can assist in repairing a broken health system

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health system

Op-Ed: Counting the economic cost of South Africa’s lockdown

Here are lessons from Rwanda on how trust can assist in repairing a broken health system

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